CSMC strives to procure interest-free loan of Rs 822 crore

Lokmat News Network

Chhatrapati Sambhajinagar:

The Chhatrapati Sambhajinagar Municipal Corporation (CSMC) will have to obtain a loan of Rs 822 crore to put its monetary share in the new water supply scheme. The state government had suggested taking the loan from HUDCO, and its rate of interest (RoI) is 9.1 per cent. Meanwhile, the CSMC is trying its best to obtain an interest-free loan. It may be noted that the Central Government had announced the granting of a non-interest loan of Rs 50,000 crore for 50 years. It includes a Rs 3,400 crore loan to Maharashtra. Hence, the municipal corporation administration is trying to attract a non-interest loan of Rs 822 crore from the state’s share. Accordingly, the civic administration has started forwarding the proposals in this regard.

It may be noted that if the CSMC takes a loan from Hudco, it would have to repay the loan in the form of a monthly instalment of Rs 16 crore. Hence, it had not initiated the loan process so far.

On April 7, 2025, the Central Government issued an ordinance to all State Governments' Urban Development and Finance Departments. This ordinance pertains to providing interest-free loans to states under the Special Assistance Scheme for Capital Expenditure for the year 2025–26.

The Urban Development Department of the State Government has sent letters to the Commissioners of the Municipal Corporations of Pune, Nagpur, Nashik, Thane, Pimpri-Chinchwad, and Chhatrapati Sambhajinagar, instructing them to submit a complete proposal by April 23.

Hence, a proposal is set to be sent by the State Government requesting the Central Government to provide an interest-free loan of Rs 822 crore to the CSMC specifically for the city's water supply project.

The loan currently being considered from Hudco (Housing and Urban Development Corporation) carries an interest rate of approximately 9.01 per cent. If the CSMC receives the loan under the Central Government’s scheme, it would be an interest-free loan for 50 years, with monthly instalments estimated to be around Rs 1 crore. This would ease the financial burden on the municipal corporation’s treasury. The CSMC administrator, G Sreekanth, has given his approval for submitting this proposal.